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In my native UK we have one of the more annoying little groupuscules who feed off the left wing envy about inequality, the High Pay Centre. They are complaining today about the fact that today is Fat Cat Tuesday: the day on which, after only five working days of the year, those who are at the helm of the FTSE100 companies will, on average, have made an amount equal to the total annual income of the average UK worker.

There is no point to this number other than to fan the flames of indignation at the idea that in a market economy some will earn more than others.

There's a number of problems with this manufactured outrage, as my colleague at the Adam Smith Institute, Sam Bowman, points out:

Top bosses will have earned more money by the end of Tuesday than the average worker will do in a year, campaign group the High Pay Centre has claimed. The group has declared the day Fat Cat Tuesday, based on chief executives earning £5m a year, compared with the median UK salary of £27,645. The think tank says its aim is to highlight the "unfair pay gap".

The calculations were criticised as "pub economics, not serious analysis" by the Adam Smith Institute. "None of these complaints are valid unless the High Pay Centre thinks it has a better way of estimating the value of executives to firms than those firms themselves," said the institute's executive director, Sam Bowman. "The High Pay Commission's complaints only make sense if you assume firms don't actually care about making money - which is to say, they don't make sense at all."

Quite so: and we can go further (in terms of the ASI Sam is regarded as the reasonable one, I am more of the boot boy bully on such matters). This is not the money of the High Pay Centre being spent on such wages, it is the money of the shareholders of those companies being spent on such wages. And who, seriously, are the High Pay Centre to be determining what other people should do with their money? Other than self-appointed scolds who would insist on abrogating to themselves the rights of other people to dispose of their property as they see fit?

Their report showed FTSE 100 chief executives were paid a staggering average of £4.96 million a year in 2014. Even if these ‘fat cats’ are assumed to work long hours with few holidays, this is equivalent to an hourly wage of more than £1,200 - more than many working Londoners take home in a month.

There is not, and should not be, any moral, economic, empirical or even theoretical reason why wages paid to FTSE100 CEOs should have any relationship at all to the wages of the average Londoner nor Briton. Because the FTSE100 is not actually a measure of the British economy in any manner at all. At least 70% of the revenues (and yes, roughly similar numbers for wage bills, profits and so on) of those FTSE100 companies come from outside the UK. There's a goodly number of companies included which simply don't have an economic presence in Britain at all. For the FTSE100 is not a collection of the largest companies in Britain. It's a collection of the largest companies listed in London. It is not necessary to do business in Britain to be a part of it. It's not even necessary to be a British resident or domiciled company, there doesn't even have to be a British subsidiary anywhere in the entire corporate structure.

It's simply nothing to do with the UK economy. Why should someone who is, for example, paid to manage a mine in South Africa have their wages benchmarked against whatever wages are in England? Why should the pay of someone running mobile banking in Kenya have anything at all to do with what a barista makes in Huddersfield? Assuming that Starbucks has actually made it that far into the provinces?

At the other end of the scale, the HPC said the FTSE bosses were handed an average of £4.96m - though that was in 2014 - with a chief executive's annual incentive award rising by almost 50% of salary.

So why do shareholders pay large wages to CEOs? Because it appears to be economically rational. Famously, Japanese CEOs are paid a very much lower multiple of average wages than those in Anglo Saxon economies. That's not quite true, as the Japanese will have many more perks in the form of golf club memberships, bills paid for them and so on. But there is still a difference, yes. And the result?

This hypothesis is verified by results showing that US firms substantially cut down on the scale of assets and workforce to increase return on assets following leadership changes, whereas Japanese firms tend to work on reducing liabilities. Despite excelling in technologies, organisational management, and human resource management, Japanese firms seem to have lower earning power because CEOs, who are responsible for corporate management, do not prioritise profit maximisation. Such tendency leads to a loss of shareholders’ equity and inefficient usage of firm resources, causing a major negative macroeconomic impact.

Note that it's not just the shareholders that lose out there. It's the entire economy.

The High Pay Centre is simply whining, in the process managing to use the wrong comparison, of one economy against people who don't actually work in that economy, and in doing so is decrying the very feature of executive pay that benefits both shareholders and the wider economy. We should thus, of course, ignore them, as ill informed jealousy is not an attractive basis upon which to base public policy about anything, let alone something as important as the pay of those who direct our most significant corporate bodies.